Milton Friedman was right about the euro you know

MILTON Friedman was not right about everything, certainly, but there was much more to his views than just that the working class should have their faces ground in the dust and the 1% should be allowed to enjoy ever rising profits without hindrance.

My point being that whatever you might think about his views of what was a desirable world, he was in fact a very good economist indeed.

That’s from 1999. Here we are in the first major recession si9nce the euro started and who is seriously willing to bet that it will last out the year entirely intact?

Sooner or later, when the global economy hits a real bump, Europe’s internal contradictions will tear it apart.

That’s not quite about the euro but we’ve certainly seen with the debt problems that this is true, haven’t we?

…there will be asymmetric shocks hitting the different countries. That will mean that the only adjustment mechanism they have to meet that with is fiscal and unemployment: pressure on wages, pressure on prices. They have no way out…Suppose things go badly and Italy is in trouble, how does Italy get out of the Euro system?

It’s turned out not to be Italy that was the first problem (although it might be the first one that’s too big to manage), rather Ireland, Greece and Portugal.

My point here though isn’t to simply praise Uncle Milt. It is, rather, to point out that very bright people really are very bright. Their worldview might not be to your taste but that doesn’t mean that there isn’t still value in their analysis of that world.

There’s great analysis in parts of Marx (even though what to do about it is a bit loopy), Keynes provides great insights even now (although some of his disciples seem intent on ignoring those good bits) and yes, Friedman, Mises, all the right wing bugbears do have useful and interesting pieces of the puzzle even if you don’t like their overall intent.

Just as one example, that London Congestion charge. Everyone sees it as being one of Red Ken’s great achievements. Perhaps it even was. But it was invented way back in the 1950s by someone who went on to become Maggie’s favourite economist, Sir Alan Walters.